Posted on April 28, 2022 in Bankruptcy

Debt is a significant issue for millions of people in the United States. In some cases, these debts may be manageable, and a person or family may be able to make affordable payments toward a home mortgage, auto loans, student loans, and/or credit cards while being able to cover their regular living expenses. Unfortunately, there are many situations where a family’s debts may become unmanageable, and they may begin considering bankruptcy. Because of the stigma surrounding bankruptcy, those who are in this position may feel that they will be looked down upon. However, understanding the reasons that people often file for bankruptcy can help a person realize that they are not alone and that they can benefit by receiving relief from their debts.

Bankruptcy Is Usually Based on Issues Other Than Financial Irresponsibility

The stereotypical bankruptcy involves a person who has engaged in reckless spending without considering the consequences of their actions. Many people believe that if a person files for bankruptcy, this is a sign that they have racked up large credit card bills, spent money on unnecessary luxuries, and generally behaved irresponsibly. However, in most bankruptcy cases, this is far from the truth. In fact, people are likely to encounter large debts because of issues such as:

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 Posted on April 27, 2022 in Bankruptcy

Debt is a significant issue that affects many families. Struggling to pay bills and fielding calls from creditors while also working full time–or more–and managing other family responsibilities can be incredibly stressful. While bankruptcy is often the best option for dealing with these situations, many people are hesitant to pursue this type of debt relief. However, the fears that people often have about bankruptcy may be unfounded. By understanding the bankruptcy process and how it will affect your life, you can make sure you are taking the right steps to regain financial stability.

Addressing Bankruptcy Fears

While there are multiple different reasons why your family may be struggling with debts, the option to file for bankruptcy is available regardless of your financial situation. As you consider whether bankruptcy is the right choice for you, it is important to remember that:

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 Posted on April 26, 2022 in Bankruptcy

Issues related to money are a common source of stress for many people. Families can sometimes struggle to cover their ongoing living expenses, especially in times when prices for many products are rising and unexpected expenses can arise suddenly. These issues can be compounded by debts. If a family is struggling to pay what they owe while also meeting their ongoing needs, they may be receiving constant calls from creditors, and they may be concerned about how this will affect their overall finances and their ability to maintain ownership of their home or other property. In these situations, bankruptcy may be an option for debt relief, but filing for bankruptcy can add additional stress, especially when a family does not know what to expect during this process. If you are struggling with debts and considering bankruptcy, you can help alleviate your stress by following these tips:

• Avoid blame - Debt is often seen as a personal failing, and those who are struggling financially may feel that they are to blame for their situation due to irresponsible behavior. However, in many cases, overwhelming debts occur because of circumstances that are out of a person’s control, such as serious health issues that lead to large medical bills while affecting their ability to work and earn an income. Regardless of the reasons for your debt, you can help avoid negative emotions by deciding to put these issues in the past and determine how to move forward and regain control of your financial situation.

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 Posted on April 20, 2022 in Bankruptcy

For those who have significant debts or who have experienced financial hardship, bankruptcy may provide them with the ability to regain financial stability. After a person files for bankruptcy, the court will place an automatic stay on all collection actions by creditors. This will prevent creditors from contacting a debtor, seeking repayment of debts that are owed, pursuing judgments against a person, taking actions to enforce judgments (such as wage garnishment), repossessing property, or proceeding with a home foreclosure. The automatic stay will provide a person with protection during the bankruptcy process, allowing them to determine the best ways to address their debts. However, there are some situations where creditors or other parties may request to have the automatic stay lifted so they can proceed with collections or other actions against a debtor. By understanding when relief from the automatic stay may be available, a person can determine the best ways to respond to these requests.

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 Posted on April 14, 2022 in Bankruptcy

When a person or family has large debts that they are struggling to repay, there are multiple options for relief. In many cases, bankruptcy can provide the best way to eliminate crushing debts. Depending on the type of bankruptcy pursued, a debtor may be required to turn over certain assets, which will be liquidated in order to repay some of the debts owed to different creditors. If a person has a retirement savings account or other types of assets that they expect to use to provide for their needs after they retire, they may be concerned about whether they will be able to maintain ownership of what they have saved or whether their accounts will be seized during the bankruptcy process.

Addressing ERISA Plans and Other Retirement Assets in Bankruptcy Cases

In a Chapter 7 bankruptcy, which is also known as a “liquidation bankruptcy,“ certain assets owned by a debtor may be seized by the bankruptcy trustee. In a Chapter 13 bankruptcy, a debtor usually will not be required to turn over their assets, but they will be required to make payments to creditors over a period of three to five years, and the amount creditors receive through this repayment plan must be at least as much as what they would have received if a person’s assets were liquidated in a Chapter 7 case.

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 Posted on April 05, 2022 in Bankruptcy

In cases where a person has extensive debts that they may be unable to repay, bankruptcy can be a good option that will provide financial relief, allowing them to receive a fresh start. However, filing for bankruptcy will require a person to take a complete inventory of the assets they own, and they will need to report a variety of financial details. By understanding what is considered “property of the estate,” a person can determine their best options for receiving relief from their debts while maintaining ownership of as much of their assets as possible.

Assets Included in the Bankruptcy Estate

The filing of a bankruptcy petition will create a bankruptcy estate that includes all money or property that will be considered during the bankruptcy process. Depending on the type of bankruptcy a person pursues, non-exempt assets in the bankruptcy estate may be seized by the bankruptcy trustee in their case. In a Chapter 7 bankruptcy, assets may be liquidated, and the proceeds will be used to repay their creditors. While a Chapter 13 bankruptcy usually will not require a person to turn over their assets, they will need to repay creditors an amount equal to the value of the non-exempt assets in the bankruptcy estate.

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 Posted on March 31, 2022 in Bankruptcy

If you are experiencing financial difficulties, you may be struggling to make payments toward multiple different types of debts and expenses. In these situations, it can be understandable to prioritize expenses that are absolutely necessary, such as rent, utilities, gasoline, and groceries, and you may have been unable to make other types of payments. In addition to getting behind on credit cards or other debts, you may have been unable to make payments toward domestic support obligations, such as child support or spousal support that you are required to pay following a divorce. While bankruptcy may provide you with some financial relief and allow you to regain financial stability, you will need to be sure to understand how it will affect the support payments that you owe.

Bankruptcy and Domestic Support Obligations

When you owe child support or spousal support, the recipient of these payments is considered to be one of your creditors. You are legally obligated to make all required payments, and if you get behind on payments, you must pay the full amount owed, and you may also be charged interest. 

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 Posted on March 28, 2022 in Bankruptcy

If you are struggling with debts, you will want to determine the options for debt relief that may be available, including bankruptcy. However, as you prepare to file for bankruptcy, you will need to be aware of certain issues that could affect you. One factor that may be considered involves any payments that you made prior to filing for bankruptcy. In some cases, these may be considered “preferential payments” that could complicate the bankruptcy process and affect your ability to discharge your debts.

What Are Preferential Payments?

When preparing for bankruptcy, it may seem to make sense to make payments toward some of your debts and pay off some of what is owed to different creditors. However, the bankruptcy laws prohibit preferential treatment of creditors. Payments made to one creditor may affect other creditors’ ability to recover what is owed to them, and in some cases, some or all of these payments may need to be returned.

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 Posted on March 11, 2022 in Bankruptcy Law

There are a variety of different types of debts that can affect a person or family. In some cases, a person may receive assistance from a friend or family member when they sign a loan. For example, a person may be looking to purchase a new car, but if they do not have a significant credit history, they may not be able to obtain a loan on their own. Having a parent or another person who has a high credit score cosign the loan will provide the lender with a better guarantee that the debt will be repaid. However, if the person experiences financial hardship that affects their ability to make ongoing payments on the loan, the co-signer may be obligated to repay the loan. While bankruptcy may be an option that can help address these debts, it is important to understand how a co-signer will be affected in these cases.

How Chapter 7 and Chapter 13 Bankruptcy Affects Co-Signers

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 Posted on March 08, 2022 in Bankruptcy Law

If you are a homeowner who has defaulted on your mortgage payments or are experiencing other issues that have affected your ability to repay your debts, you may be considering bankruptcy. Filing for bankruptcy will allow you to halt foreclosure proceedings as you determine your options. If you plan to pursue a Chapter 7 bankruptcy, this will allow you to discharge a number of different types of debts, eliminating the requirement to repay what you owe and ensuring that you will receive a fresh financial start. However, the discharge of your mortgage loan will allow your lender to proceed with a foreclosure and take possession of your home. To prevent this, you may choose not to include your mortgage in your bankruptcy, and if you continue making payments while also making up any past-due payments or related fees, you may be able to maintain ownership of your home. 

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